Daimler profits fell in the third quarter, owing to a car recall, upgrades for existing diesel vehicles and higher expenses on new technologies.
The parent of Mercedes-Benz reported €3.46bn in operating earnings, “significantly below” the €4.04bn a year ago but ahead of forecasts at €3.25bn.
The group posted record unit sales and revenue – up 6 per cent to €40.8bn – but earnings fell from a year ago due to a €230m charge to pay for a car recall and a €223m charge for upgrades to existing vehicles, as Daimler fights against measures to ban older diesel cars from entering a number of European cities.
The German company also said it is paying more for “new technologies and future products,” which is weighing on current earnings. Daimler spent €2.3bn on R&D last quarter, up from €1.9bn a year ago.
The world’s largest maker of luxury cars said net profit fell to €2.27bn, down from €2.73bn a year ago.
Mercedes-Benz and the smart brand increased sales by 6 per cent last quarter, to 597,300 units. Operating margins for Mercedes cars fell to 9.2 per cent, from 11.8 per cent a year ago.
The group’s Trucks division reported a turnaround, with unit sales climbing 30 per cent to 126,600 vehicles, driven by growth in North America. Revenue for the unit was €9.2bn, up from €7.9bn a year ago, while operating earnings climbed to €614m from €464m.
Dieter Zetsche, chief executive, said the group was focused on securing sustainable profits for the future, which could include revamping the corporate structure by separating the cars from the trucks business.
“Now is therefore the right time to examine – from a position of strength – whether we can position ourselves even better to shape the automotive era definitively and successfully from the top,” he said.
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